Showrooms are now required to display posters showcasing the new prices under GST 2.0 for cars and motorcycles. These posters need to present the previous and new prices, and must include a photograph of Prime Minister Narendra Modi. The Ministry of Heavy Industries (MHI) has issued instructions to car and two-wheeler manufacturers to put up these posters across all their dealerships. The posters should clearly show the price differences due to the changes in the Goods and Services Tax (GST).
The Society of Indian Automobile Manufacturers (SIAM) is the channel through which these instructions reached the companies. The ministry has also stated that the posters must feature a picture of Prime Minister Narendra Modi. As a result of the new regulations, automotive companies are currently in the process of preparing these posters and sending them to the ministry for approval.
The new GST rates are slated to be enforced from September 22.
The introduction of GST 2.0 in India is directly affecting car prices. The new tax system includes only two slabs for cars: 18% and 40%. Small cars, including petrol/CNG engines up to 1200cc and diesel engines up to 1500cc, with a length less than 4 meters, will now be subject to only 18% GST. Previously, these cars were taxed at 28% GST plus a 13% cess, resulting in a total tax of up to 29-31%. This has now been reduced to 18%. Large and mid-size cars and SUVs (engines above 1500cc, longer than 4 meters) will now be taxed at 40% GST. Previously, they had 28% GST and a 15-22% cess, resulting in a total tax of up to 43-50%. This category also sees a tax decrease of 5-10%.
Two-wheelers will also become more affordable.
GST 2.0 in India has a significant impact on two-wheelers. The government has set new tax rates, making smaller scooters and bikes more affordable for consumers, while premium and high-end bikes have become more expensive. Under the new system, bikes up to 350cc and all scooters will be taxed at only 18% GST. Previously, they were taxed at about 31% (28% GST + 3% cess). Bikes above 350cc will now be taxed at 40%. They were previously taxed at approximately 31%.